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Workmen’s Compensation Act, 1923

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MATERIAL 1
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Workmen’s Compensation Act,
1923

Dr. T.K. Jain.

AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
tkjainbkn@yahoo.co.in
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Objectives of the law…

• One of the oldest legislation of social
security in India.
• a workman who dies or suffers
disablement (partial or total) due to
accident is entitled to get compensation.

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Coverage – even if one worker is
employed…

• The act is applicable on factories etc.
(where ESI Act is not applicable),
however, this act is applicable even when
only one worker is employed and it is not a
not a factory‘ under Factories Act. Sunil
Industries v. Ram Chander 2000 AIR
SCW 4109 = 2001 LLR 64 = 2000(7)
SCALE 415.

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Workmen under the act:

• Section : 2(1)(n)
• Workman‘ means * railway servant * crew
of ship * Crew of aircraft * Driver, cleaner,
helper or mechanic of motor vehicle *
Person recruited abroad * Employed in
capacity specified in Schedule II
The central govt. or state govt. can add new
class of workmen in schedule II after
giving at least 3 month notice.
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Schedule II

• It includes manufacturing process, explosives,
mine, ship, loading/unloading, construction,
electricity generation and distribution, drivers,
horticulture, circus etc.
• Cultivation of land, fishing, rearing of live stock is
covered if more than 25 persons are employed.
• Persons employed outside are also covered.
However, persons employed in clerical capacity
are excluded.

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Mode of compensation…

• Mode of computation of compensation is
given in section 4 of the Act.
Compensation is payable to workmen. It is
payable to dependents of workman in
case of death.

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Coverage : all the workers in factories
etc. are covered…
• Every employee, including those employed through
contractor, but excluding casual employees who is
engaged for purpose of employer‘s business is
eligible. The Act does not cover employees
employed in clerical capacity. However, workmen in
manufacturing processes, mines, ships,
construction, tractor or mechanical appliances in
agriculture, circus etc. and also drivers, watchmen
etc. are covered. The compensation is payable if
accident arises out of and during the cause of
employment, and such accident causes either death
or disablement.

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Coverage…- employees covered under
ESIC not to be covered by this law
• Employee State Insurance Act is also
similar law and therefore a worker cannot
get compensation under two laws
• Since a workman is entitled to get
compensation from ESIC, a workman
covered under ESI Act is not entitled to
get compensation under Workmen‘s
Compensation Act, as per section 53 of
ESIC.

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Employer’s liability to pay compensation

• An employer is liable to pay compensation
if personal injury is caused to a workman
by accident arising out of and in the
course of his employment. [section 3(1)]

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Exceptions – when compensation is not
available :

• In case of Injury which does not result in total or
partial disablement of workman for a period
exceeding 3 days
• Injury caused by an accident directly attributable
to workman under influence of drinks or drugs
willful disobedience of express orders for safety
willful removal of safety guard or device. [Even if
such case, if the workman dies or suffers
permanent total disablement, the employer will
be liable].

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Who are dependent persons?

• Sec. 2(1) (d) :
• (1)widow, minor legitimate or adopted son, an
unmarried legitimate or adopted daughter, or a
widowed mother
• (2) if wholly dependent, - son, daughter who has
attained the age of 18 years, and who is infirm and
• (3) if wholly / partly dependent :
• Widower
• a parent other than widowed mother
• Minor illegitimate son, unmarried illegitimate
daughter

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Continued…

• Daughter legitimate or illegitimate or
adopted if married and a minor or if
widowed and a minor
• Widowed daughter in law
• A minor child of a pre=deceased son
• A minor child of a pre-deceased daughter
where no parent of the child is alive
• A paternal grandparent, if no parent of the
workman is alive
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What is partial disablement?

• Where disablement reduces the earning
capacity of the workman in the employment in
which is was working at the time of accident - it
is called temporary partial disablement.
• Where disablement reduces the earning
capacity for all times in every employment in
which he was capable earlier – it is called
permanent partial disablement.
• Schedule I gives list of diseases which causes
permanent partial disablement.

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What is total disablement?

• Whether temporary or permanent – which
incapacitates a workman for all work
which he was able to perform at the time
of accident (mentioned in part I of
schedule I or combination of injuries
mentioned in Part II of schedule I, where
the aggregate of such injuries is 100% or
more)

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Example:

• Pratap Narain Singh Deo Vs sriniwas
Sabata : (1976) : a carpenter lost his left
hand, it was held by the court that he
suffered from total disablement – as he
would not get any job of carpentry – as
now he cannot do carpentry.

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Employment disease

• Employer is liable if a workman contracts
any specified occupational disease, while
he is in service of employer for at least 6
months. [section 3(2)].

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Compensation payable – even if no fault
of employer
• The compensation is payable even when
there was no fault of employer. In New
India Assurance Co. Ltd. v. Pennamna
Kuriern - (1995) 84 Comp. Cas. 251 (Ker
HC DB), claim of workmen for
compensation under Motor Vehicle Act
was rejected due to negligence of
employee, but compensation was
awarded under Workmen‘s Compensation
Act on the principle of no fault‘.
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Quantum of compensation

• In case of death resulting from injury, minimum
compensation is Rs. 80,000. Maximum
compensation is an amount equal to 50% of monthly
wages of deceased workman multiplied by factor
depending on age (More the age, lower the
compensation). If salary exceeds Rs 4,000, it will be
considered as Rs 4,000 only for purpose of
calculating the compensation. Maximum
compensation is Rs. 4,57,080 if a person at the time
of death was 16 years of age an. In addition, funeral
expenses upto Rs 2,500 are payable. [section 4(3)].

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Quantum of compensation in case of
disablement…
• In case of permanent total disablement,
minimum compensation is Rs. 90,000. Maximum
compensation is an amount equal to 60% of
monthly wages of deceased workman multiplied
by factor depending on age (More the age, lower
the compensation). Maximum compensation
payable is Rs. 5,48,496, if workman was 16
years of age at the time of accident. - - In case
of permanent partial disablement, compensation
is payable on basis of percentage of loss of
earning capacity.
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Compensation – protected…

• The compensation paid under the Act is
protected, i.e. it cannot be attached or
assigned. [section 9].

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Compensation – liability of principal employer
– even if employed through contractor…

• Principal Employer is liable to pay the
amount of compensation for the injury
suffered by workman employed through
contractor, if the accident arises as a
result of accident arising out of and during
the course of employment. [section 12].

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Payment of compensation through
commissioner…
• A Commissioner for Workmen‘s Compensation
is appointed by Government. The compensation
must be paid only through the Commissioner in
case of death or total disablement. Any lump
sum payment to workman under the Act must be
made only through Commissioner. Direct
payment to workman or his dependents is not
recognised at all as compensation. However, in
case of death, if employer has paid some
compensation to dependent, that will be
refunded to employer. [section 8(1)].
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Expenditure by employer is not
compensation…

• Expenditure made by employer for
medical treatment of workman is not
considered for purposes of the
compensation.

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Punishment to employee for
disobedience etc.
• Any punishment of suspension or dismissal can
be imposed after conducting a Domestic
Enquiry‘. Principles of natural justice have to be
followed. Termination of an employee without
following principles of natural justice is violative
of Article 21 of Constitution - D K Yadavv. JMA
Industries Ltd. 1993(67) FLR 111 (SC) = 1993
LLR 584 = 1993 AIR SCW 1995 = (1993) 3 SCC
259 = 1993(3) SCALE 39 = JT (1993) 3 SC 617
= 1993(2) LLN 575 (SC).
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Procedure of enquiry …

• For proper conduct of enquiry (1)
Employee should be informed of charges
leveled against him (2) Witnesses should
be ordinarily examined before him. (3) The
employee should be given fair opportunity
to cross examine the witnesses, including
himself (4) The enquiry officer should
record his findings with reasons. – Sur
Enamel v. Workmen (1964) 3 SCR 616 =
(1963) 2 LLJ 367 (SC)
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Compensation payable even if worker
was careless…
• Compensation is payable even if it is found that
the employee did not take proper precautions.
An employee is not entitled to get
compensation only if (a) he was drunk or had
taken drugs (b) he wilfully disobeyed orders in
respect of safety (c) he wilfully removed safety
guards of machines. However, compensation
cannot be denied on the ground that workman
was negligent or careless. – Mar
Themotheous v. Santosh Raj 2001 LLR 164 (Ker
HC DB).
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